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Republicans push six-week debt limit hike — MarketWatch

RobertSchroeder

WASHINGTON (MarketWatch) — House Republican leaders on Thursday offered President Barack Obama what they called a “good faith” proposal to temporarily increase the nation’s debt ceiling and negotiate a budget deal, with the government remaining shuttered for a tenth straight day.

Reuters

House Speaker John Boehner (C) with fellow Republican House leaders

White House press secretary Jay Carney said the Republican debt-limit plan was “encouraging.” Obama would likely sign a short-term bill if it is “clean,” Carney said, meaning free of Republican policy prescriptions. But he added that the White House has seen no bill from House Republicans. He said that Obama “strongly prefers” a long-term increase in the borrowing limit.

Speaking to reporters after a meeting of the Republican caucus, House Speaker John Boehner said he hoped Obama would view the idea for a six-week extension as an attempt to meet him halfway.

The Republicans’ offer would not reopen the government. Boehner said that would be discussed at a White House meeting with Obama Thursday afternoon. Republicans made no comments when they left the roughly 90-minute White House meeting.

Boehner: We have been trying to have conversations

House Speaker John Boehner said Thursday that talks on the government shutdown and debt ceiling are at a standstill, expressing that we have been trying to have conversations.

“What we want to do is offer the president today the ability to move,” the Ohio Republican said after the caucus meeting. “A temporary increase in the debt ceiling [and] an agreement to go to conference on the budget, for his willingness to sit down and discuss with us a way forward to reopen the government.”

The plan would prohibit the Treasury from using so-called “extraordinary measures” to avoid default, The Wall Street Journal reported, citing aides. The Treasury has used such moves — such as temporarily halting issuance of securities to state and local governments — to stay under the borrowing limit. Treasury Secretary Jack Lew reiterated Thursday that the deadline for raising the borrowing limit is Oct. 17, when the government runs out of borrowing authority.

Carney also dug in on Obama’s position that he wouldn’t negotiate on Republican demands on the budget or other issues until the government re-opened. Obama has urged Congress to pass a clean debt-limit increase and a so-called continuing resolution to reopen the federal government. But he has indicated willingness to consider short-term agreements.

Republicans “should do both,” Carney said about funding the government and raising the borrowing limit.

Obama has asked Senate Republicans to attend a White House meeting on Friday morning.

Conservative group Heritage Action said it opposes a short-term debt-limit increase, but, significantly, said it won’t lobby against it so House leaders can have “flexibility” to refocus the debate on Obama’s health-care law.

Lew pressed Congress for a long-term increase in the debt limit in testimony on Thursday before the Senate Finance Committee. But he said that Obama would accept a short-term extension.

“The longer the period of time is, the better for the economy,” Lew said. Read recap of live blog of Lew’s testimony.

U.S. stock markets SPX, +0.44% jumped on Thursday as optimism grew about a deal to lift the debt ceiling. Read Market Snapshot .

Wall Street liked the movement in Washington. But the head of the New York Stock Exchange’s parent company was underwhelmed.

“I don’t think we should allow them to feel that that solves the problem,” said Duncan Niederauer. “All that does is kick the can down the road for six weeks.” Read more on Capitol Report .

In his testimony, Lew harshly criticized the idea of “prioritizing” payments the government makes. That idea would just be “default by another name,” he said.

Senate Democrats are preparing this weekend to begin voting on a bill that would extend the debt ceiling through 2014. A senior Senate Democratic aide told the Hill newspaper “don’t assume” that Majority Leader Harry Reid will accept a six-week extension.

House Minority Leader Nancy Pelosi, meanwhile, left the door open to backing the Republican proposal. She said she wants to see details, though she prefers a longer extension.